2018 was a year of transformation for Hummingbird Resources as the AIM-listed company completed its journey from gold explorer to gold producer at the Yanfolila mine in Mali, West Africa. After ramping up to full-scale production in Q1, the miner went on to pour 91,620 ounces of gold in 2018 – only a few hundred ounces short of its top end revised guidance, after an unusually heavy wet season limited capacity at Yanfolila.
However, the Hummingbird team rose to the challenge and executed a remediation plan to get the operation back on track this year, as it works towards a 2019 guidance of 110-125,000 ounces of gold. Also on the agenda for Hummingbird this year is the construction of a second ball mill at Yanfolila and a near-mine exploration campaign. RGN’s editor catches up with Hummingbird’s managing director Dan Betts, who also discusses the firm’s partnership with Cora Gold and the Dugbe project in Liberia.
Jacob Ambrose Willson: Dan, after reaching nameplate capacity at the Yanfolila mine in Q1 last year, the primary target for Hummingbird in 2018 was to maintain those production levels. What challenges arose over the course of the year and how happy are you with the overall gold output of Yanfolila in 2019?
Dan Betts: 2018 was an important year for us at Yanfolila, with successful ramp up of operations and consistent grade and recoveries coming out of our plant. Of course, the latter part of the year proved slightly more challenging when stability issues were identified at the Komana East pit and a public bridge on the road to site was issued a restrictive weight limit. These issues were a result of unusually heavy wet season.
With our remediation plan nearing completion though, the Group is now in a good position to return to full capacity and continue the cash generation that Yanfolila is capable of. Notwithstanding, we are one of the top 10 UK producers in year one of operation, we’re confident with the guidance figure we’ve given for 2019 and look forward to pouring more gold!
JAW: How will Hummingbird ensure Yanfolila hits its 2019 FY guidance of 110-125,000 ounces and therefore ensure the company returns to full profitability?
DB: Last year’s issues have certainly made for a more experienced and skilled team and we can now take what we’ve learned from those challenges to work towards a wholly positive 2019. Our project to install a second ball mill is due to be complete in Q3 and this will increase our plant throughput towards the end of the year. All together, these elements will help us deliver on our expectations.
JAW: Hummingbird also embarked on an exploration programme at Yanfolila last year. To what extent have the recent high grade returns from the Gonka and Komana West deposits increased confidence in the extension of the mine life at Yanfolila?
DB: The drilling results have been hugely encouraging. Drilling commenced in July last year and has more recently focused on the resource definition at Gonka, with some further follow up drilling at Komana West.
The results have highlighted the high grade returns from Gonka as well as signified zones at Komana West inside the minable pit shell (previously found outside the resource model). The results collectively give us encouragement that we can increase the mine life at Yanfolila.
JAW: How much further exploration is required across the six near-mine deposits in 2019 in order to convert the maximum amount of resources to reserves?
DB: So far, the Group’s exploration drilling has focused on infilling the open pit resources. Our attentions will now switch to drilling out the underground resources at Gonka, which is very exciting since this is where the highest grades and wider intervals have been previously drilled by Gold Fields Ltd, the former licence owner.
Once the exploration results are received and analysed, we can set out the findings and see how these can benefit the mine life at Yanfolila, which should be within the course of the year.
JAW: How important is it for Hummingbird to continue developing Yanfolila’s facilities as it anticipates further reserve growth?
DB: Developing our capacity is a key objective and a second ball mill will significantly increase throughput capacity from 1Mtpa to 1.24Mtpa (+24%) when operating at 100% fresh ore. With our service contractor AMS, we are also evaluating ways to streamline operations and allow further throughput on an ongoing basis.
JAW: Turning to Hummingbird’s partnership with Cora Gold, how are you assisting them with their exploration efforts in Mali near the Yanfolila mine?
DB: We’re encouraged by Cora’s progress in Mali and while we don’t have a part in operationally assisting the Group per se, Yanfolila does provide optionality for their exploration campaign. Bert Monro, Hummingbird’s head of business development, sits on Cora Gold’s board and is there to lend his extensive experience in the sector.
JAW: How much of a priority will the development of the Dugbe gold project in Liberia be in 2019?
DB: The Dugbe Gold Project currently has a gold resource of 4.2Moz, so it’s a significant asset and one of real value to Hummingbird. The Dugbe Mineral Development Agreement (MDA) is now going through the final phase of approval from the Liberian Government. Once this is complete, we will be able to consider our next steps for the project.
JAW: The partnership with Cora (who are also active in Senegal), along with Hummingbird’s own assets in Mali and Liberia, shows a real commitment to West Africa’s gold industry. What can you say about West Africa as an investment jurisdiction and as a world-class gold hub?
DB: West Africa has been a prosperous and important part of Hummingbird’s success. We’re proud of our in-country relations and what we’ve achieved in the region to date. While we do look at a broad range of projects globally, the region speaks for itself as a prolific gold exploration and production area. Ultimately for us though, it’s about finding the right project for Hummingbird, which comes down to our experience and strengths.
JAW: Hummingbird undertook a targeted year-round local community beneficiation programme in 2018, which involved creating employment opportunities for local women and clean water initiatives amongst other areas. What will the company focus on in 2019 as part of its approach to responsible mining?
DB: Last year’s far-reaching responsible mining projects were carried out successfully and we’ll be setting ourselves the same ambitious goals for 2019. The programme has not been published yet but continues our focus on water and sanitation, agriculture, local employment, education and crucially, health.
The latter in particular is hugely significant to us and I’m pleased that we’ll be continuing our partnership with Critical Care International (CCI) to deliver an incredibly high standard of healthcare to the mine and local communities.
JAW: Finally, if the main priority for Hummingbird last year was consolidation, what is the stand-out objective for 2019?
DB: The plan for 2019 is to focus on achieving production guidance and completing the second ball mill project to time and budget. Together with further positive exploration results, we would hope to establish ourselves as a mid-tier mining company in 2019.